“The U.S. grew slightly faster at a 2.1% pace in the
fourth quarter and corporate profits rose again, offering further evidence that
the economy entered 2017 on stronger footing than it did a year earlier.” Story
at….
UNEMPLOYMENT CLAIMS (Reuters)
“The number of Americans filing for unemployment benefits
fell less than expected last week, suggesting some loss of momentum in a labor
market that continues to tighten. Initial claims for state unemployment benefits
slipped 3,000 to a seasonally adjusted 258,000 for the week ended March 25…”
Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was up about 0.3% to 2368.
-VIX rose about 1% to 11.54.
-The yield on the 10-year Treasury rose to 2.415%.
(Traders sold bonds and bought stocks.)
Late day action was up a little on the day and the 10-day
average moved up giving a bullish indication. The small caps were very strong
in late-day action and they often lead after a bottom. The Financials (XLF)
were up 1.3%; Utilities (XLU) fell 0.8%; and bonds sold off. These suggest investors are betting on a recovery
in stocks rather than correction. VIX was up 1% so the options boys aren’t
completely bullish. The Index has moved up to the downward trend-line marking
the pullback so far. The S&P 500
will need to move up in the next day or two or traders will get nervous.
My Sum of 16-Indicators slipped from -4 to -5 but longer
term the curve is up so indicators are moderately bullish. New-High/New-low
data is improving, but not following through with a bullish signal yet.
I remain short-term bullish; in the longer term I’m
cautiously bullish - the longer term indicators are holding up reasonably well
(except for Sentiment) so we’ll keep watching.
CURRENT RANKING OF 15 ETFs (Ranked Daily)
Recently (before today) the Financials (XLF) have been
falling and my momentum rank hadn’t moved much. I looked back at some of the
prior analysis and decided to use my older version of the Momentum System. Up
until last week, the two versions were nearly identical.
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the 4-months
from Oct thru mid-February 2016, the number 1 ranked Financials (XLF) outperformed
the S&P 500 by nearly 20%.
*For additional background on the ETF ranking system see
NTSM Page at…
I would avoid iEAFE (Europe and Far East) & XLE;
currently their 120-dMAs are declining.
Recommended ETF Portfolio of top 3:
1. Technology Select Sector SPDR ETF (XLK)
2. Schwab emerging Markets (SCHE)
3. SPY, IBB, XLY, and XLV are all essentially tied for
third*.
*XLU was actually 3rd, but I am not inclined to recommend
it unless it appears a defensive position is required – XLU was down 0.8% today.
Financial Select Sector SPDR (XLF) is close enough to own if one believes that
interest rates will rise. XLF was up 1.3% today.
(I took positions in XLF and XLK Wednesday, 29 March.)
As we guessed yesterday, Financials were the big winner
for the day and Utilities were the big loser.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
I closed all remaining short positions on 3/28/2017. My losses were big enough that I am too embarrassed
to list them here.
- Rydex S&P 500 2x Strategy. Established 3/28/2017
- 2x S&P 500 ETF (SSO). Established 3/28/2017
-“In a bull market, you can only be long or
neutral.” – D. Gartman
-“The best policy
is to avoid shorting unless a major bear market is underway and downside
momentum has been thoroughly established. Even then, your timing must sometimes
be perfect. In a bull market the trend is truly your friend, and trading
against the grain is usually a fool's errand.” – Clif Droke.
“There are two kinds of forecasters. Those who
don’t know, and those who don’t know they don’t know.”- John Kenneth Galbraith.
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Neutral on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2014, using these
internals alone would have made a 9% return vs. 13% for the S&P 500 (in on
Positive, out on Negative – no shorting).
LONG TERM INDICATOR
Thursday, Sentiment was negative (Bullishness is at an
extreme.); Price, Volume & VIX indicators were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased
stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) Friday, 24
March 2017 in my long-term accounts, based on short-term indicators.
Remainder is 50% G-Fund (Government securities). This is a conservative retiree
allocation based mostly on low volume at the test of the recent bottom.
